Including special items, Terex reported earnings of 27 cents per
share in the quarter compared with 33 cents in the year-ago
quarter.

Total revenues increased 1% year over year to $1.822 billion,
missing the Zacks Consensus Estimate of $1.952 billion. Excluding
the impact of the Demag Cranes AG acquisition, net sales
decreased 8% year over year.

Selling, general and administrative expenses rose 10.6% to $246.7
million in the quarter. The company reported an operating income
of $131.9 million compared with $52.6 million in the year-ago
quarter.

Segment Performance

Total revenues at
Aerial Work Platforms
increased 17.2% year over year to $526.1 million. The improvement
was due to a replacement-based demand increase in the North
American rental channel, fleet growth for aerial work platforms,
sales from an acquired business along with modest growth in the
markets of Europe and Latin America.

Operating income saw a whopping increase of 119.6% to $59.3
million from $27 million in the prior-year quarter, driven by
price realization, volume and customer mix.

Total revenues at the
Construction
segment dipped 26.6% to $290.4 million. Results deteriorated due
to soft demand in the end markets, especially in Western Europe.
Global demand for material handlers remained weak along with soft
trucks and compact construction equipment businesses.

The segment reported an operating loss of $8.3 million versus a
loss of $6.4 million in the year-earlier quarter, driven by
reduced sales volumes and negative product and geographic mix,
partially offset by price realization along with the cost saving
efforts.

Operating income went up to $47.6 million from $25.1 million in
the year-earlier quarter, driven by price realization and cost
cutting efforts.

Total revenues at
Material Handling & Port Solutions
inflated 22.2% to $470.8 million. The improvement stemmed from
the addition of full quarter results of Demag Cranes, boost in
deliveries of standard and process cranes to consumers in Western
Europe, South Africa and the Middle East as well as from higher
service activity.

The segment reported operating profit of $19.9 million compared
to a loss of $1.8 million in the year-ago quarter. Operating
profit benefited from fair value adjustment of inventory.

Total revenues at the
Material Processing
segment were $149.9 million, down 12.4% year over year due to
lower demand for mobile screening in Western Europe and India.
The negatives were partially offset by strong demand in North
America, Australia as well as Latin America.

The segment reported an operating profit of $15.2 million, up
from $12.4 million in the prior year quarter. Operating profit
improved, driven by price realization, positive mix of products
and geographies as well as from adjustments made in production
and costs in response to a softer demand condition.

Financial Position

As of September 30, 2012, cash and cash equivalents amounted to
$542.6 million versus $774.1 million as of December 31, 2011.
Cash from operating activities was an inflow of $138.8 million in
the first nine months of 2012 compared with usage of $107.6
million for the first nine months of 2011.

Outlook for 2012

Management expects net sales to remain at $7.5 billion and
reiterated the guidance for earnings in the range of $1.95-$2.05
per share.

Our View

Terex aims at improving margins and integrating the Material
Handling & Port Solutions segment for a long-term
profitability. It also focuses on improving its earnings and
generating cash flow to help reducing the debt level.

Recently, the company has redeemed $300 million senior notes
bearing an interest rate of 10-7/8% and maturing in 2016.
Debt-to-capitalization ratio improved to 50.1% as of September
30, 2012, from 54.7% as of June 30, 2012 and 54.6% as of December
30, 2011.

However, Terex faces competition from large players with greater
financial resources like
Caterpillar Inc.
(
CAT
) and
Deere and Company
(
DE
). Caterpillar's third-quarter 2012 earnings increased 49% year
over year to $2.54 per share, beating the Zacks Consensus
Estimate of $2.21.

Terex retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on the stock.

Please note that once you make your selection, it will apply to all future visits to NASDAQ.com.
If, at any time, you are interested in reverting to our default settings, please select Default Setting above.

If you have any questions or encounter any issues in changing your default settings, please email isfeedback@nasdaq.com.

Please confirm your selection:

You have selected to change your default setting for the Quote Search. This will now be your default target page;
unless you change your configuration again, or you delete your
cookies. Are you sure you want to change your settings?